Weekend reads – Must read articles from the last week

There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.

Each Saturday morning I like to share some of the ones I’ve read during the week.

The weekend will be over before you know it, so enjoy some weekend reading.

First-home buyers rejoice: Affordable Melbourne property is becoming slightly more so

Are first home buyers about to strike gold in the Melbourne property market?

According to an article on Domain.com.au Melbourne’s drop in property prices, means we could be seeing a rise in first home buyers.

The low end of the Melbourne property market has taken a hit, after spending months holding up better than higher-priced homes.

Surging first-home buyer demand had kept pushing prices higher for the cheapest homes for the past nine months even as the broader market weakened, but now steadily decreasing demand and tight credit has seen a halt to the low-end supremacy.  Propertyupdate Victorian Property Melbourne

For the bottom 25 per cent of sales, price growth had been tracking at an annual 5.3 per cent in the September quarter last year, on Domain data.

But this dropped to -0.9 per cent in the December quarter for this bracket, which has a median price of $580,000.

The top 75 per cent of houses, with a median of $1.026 million, have been harder hit.

This price bracket recorded a 1.7 per cent fall in the September quarter, accelerating to a 10.8 per cent fall in the December quarter.

bottom-and-top-percentile-price-changes-in-houses-and-units_cllul4

Further falls were likely for both segments of the market, Domain senior research analyst Nicola Powell said.

“We are seeing a more broad spectrum downturn across Melbourne. 

propertymarketupdate

It was focused on the upper end but now we’re seeing all regions and price points fall,” she said.

“Until we see signals that lending clamps will be loosened, the market will continue to fall.”

Associate director of property at ANZ Daniel Gradwell agreed the credit-fuelled downturn was now spread across the entire property market.

“What’s interesting now is the divergence is still there, but the gap in what’s happening there is narrowing,” he said.

“The difference being it’s now really negative and not very negative, instead of slightly positive and slightly negative.

“It shows the credit tightening is affecting everyone.”

Mr Gradwell said it had taken more time for the lower end of the property market to feel the impact of the credit tightening, due to lower debt-to-income ratios when compared to more wealthy home owners.  melbourne-city-park-happy-peace-victoria-garden

Dr Powell agreed. “What we have tended to see historically is that the top end leads in price growth but also in the downturns as well,” she said.

The stamp duty concession and grant for first-home buyers offered by the state government had encouraged enough buying to keep a floor under prices for most of the downturn, Dr Powell said.

“When you see a new initiative come into play, you get an influx of new people trying to take advantage of the incentives,” she said.

Dr Powell said while it appeared prices were falling across the city, the prices where it mattered for entry-level buyers were stubbornly strong but this has changed as demand dried up.

Read the full article here

Why you won’t recognise Brisbane in 5 years

What’s ahead for the Brisbane market?

This Blog by Pete Wargent looks at what we can expect to see.

Brisbane transformation

First came the apartments boom

But with construction in that sector now having slowed right down, the next 5 years it will be all about commercial development.

And how!

In fact, you won’t even recognise Brisbane 5 years from now.

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Read the full article here

Real estate agents to dob in dodgy Chinese buyers under Labor government

Are we in for a massive shakeup?

This article from Realestatebusiness.com.au suggests that should the Labor government come into power there will be significant changes when it comes to ‘dodgy Chinese’ buyers..

Real estate agents, along with lawyers and accountants, will be required to report dirty money that is used to buy property if Labor wins the federal election, media reports are suggesting.

If Labor is elected into government, shadow Treasurer Chris Bowen has undertaken to extend anti-money laundering laws to a range of professionals, including real estate agents, according to the ABC.

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In an ABC Four Corners program last week, it was shown that law enforcement agencies in China called on former Australian detectives to find the proceeds of crime which may have been used by corrupt Chinese officials to buy property in Australia.

According to the ABC, criminals are known to clean dirty money by buying legitimate assets overseas, such as houses, and that Australia has long been used as a destination to do it.

It said that real estate agents are often seen as the “weak link”, along with lawyers and accountants, on account of the fact that, under current laws, they are not required to report dodgy deals that might appear to be suspicious.

Apparently, China has called on former police detectives in Australia (and other Western countries) in the past to assist in recovering “hot” money taken out of the country, allegedly running into many millions of dollars.

The ABC has also reported that the federal government delayed the extension of the anti-money laundering laws to non-financial businesses and professions last year, including real estate agents, prompting Mr Bowen to accuse the government of failing to be tough on overseas law breakers.

Read the full article here

What 20 years in property can do

The property market looked very different 20 years ago, and in 20 years it may look very different still.

So is there really a ‘best’ time to buy property?

In this article for Switzer, John McGrath looks at what we really need to consider.

There’s a recurring question in real estate…

‘When is the best time to buy property?’ Answer: Twenty years ago. Future Sydney Scenarios

‘When is the next best time to buy property?’ Answer: Today.

Some new data from CoreLogic crystallises this message.

Over the past 20 years, national property values have increased by 197.4%.

That means a house worth $500,000 back in 1999 is now worth close to $1.5 million today.

Just think about that for a minute.

Where were you 20 years ago?

How cheap does $500,000 look today compared to back then?

Over my 35 years in real estate, so many people have told me about the golden buying opportunity they missed 20 years ago because they got scared.

It’s sad to listen to these stories and see the looks on people’s faces as they lament what that one investment 20 years ago could have done for them today.

The wealth, security and lifestyle options that such significant capital growth would have given them at this point in their lives.

These stories are all about fear and the herd mentality. 39653963_l

Here’s what Warren Buffett, one of the world’s most successful investors, has to say about fear: ‘Be fearful when others are greedy.

Be greedy when others are fearful’.

Let’s apply that logic to today’s market conditions in Sydney and Melbourne.

Are people greedy right now, or fearful?  Yes, they’re fearful. The scary headlines are getting to them.

They can see that property prices have fallen 10-15% and the buying opportunities are there but they’re hesitating.

Why are they hesitating? Because ‘the herd’ is talking about how bad it is out there; and no one wants to be the little black sheep who buys amongst all this doom and gloom.

Here’s the reality – let’s take Sydney.

We had 75% growth over five years, followed by a 10-15% price drop to date. Sydney+suburbs

This is not even remotely catastrophic – nor unexpected.

Even for buyers who purchased at the top, all they need to do is remain in their new homes or hold their investments for the medium to long term, which should always be the plan when you buy real estate anyway.

While there are definitely cycles in the property market, well-located and in-demand property rarely declines in value.

Let’s go back to the CoreLogic stats.

Over the past 20 years, combined capital city values have increased by 212.4%. Combined regional markets have jumped 150.3%.

Let’s dig deeper and survey the performance of our East Coast capital city and regional markets…

Capital growth over 20 years  

  1. Melbourne takes the cake with 274.6% growth in home values over 20 years
  2. Canberra 230.7%
  3. Sydney 201.9%
  4. Regional NSW 185.6%
  5. Brisbane 182.8%
  6. Regional VIC 179.5%
  7. Regional QLD 123.6%

Now, not every property in Australia will have amazing growth over 20 years.

Local factors in different states, like the impact of mining and short-term commodity booms on the regional Western Australia market can have a big impact on long term capital gains.

Read the full article here

12 rich, powerful people share their surprising definitions of success

What is your definition of success?

An article on Business Insider looks at what success truly means to something the most powerful people in the world.

When we talk about a “successful” person, we’re typically talking about someone who’s got billions in their bank account, someone who’s authored multiple bestsellers, or maybe someone who’s in charge of an entire nation.

But if you ask people who fit the conventional definition of a successful individual, many will tell you that those achievements aren’t what make them feel accomplished.

Below, Business Insider has rounded up what some of the world’s most powerful and impressive people – from President Barack Obama to the late author Maya Angelou – have to say about success.

Billionaire Richard Branson believes success is about happiness.

Though Sir Richard Branson, founder of the Virgin Group, is worth some $US5 billion, the Virgin founder equates success with personal fulfillment.

“Too many people measure how successful they are by how much money they make or the people that they associate with,” he wrote on LinkedIn. “In my opinion, true success should be measured by how happy you are.”


Huffington Post co-founder Arianna Huffington says that money and power aren’t enough.

Huffington says that while we tend to think of success along two metrics – money and power – we need to add a third.

“To live the lives we truly want and deserve, and not just the lives we settle for, we need a Third Metric,” she told Forbes’ Dan Schawbel, “a third measure of success that goes beyond the two metrics of money and power, and consists of four pillars: well-being, wisdom, wonder, and giving.”

Together, those factors help you to take care of your psychological life and truly be successful, or as the title of her 2014 book, “Thrive,” suggests.


Billionaire investor Mark Cuban says you don’t need money to be successful.

“Shark Tank” regular Cuban offers a surprisingly simple take on success.

In an interview with Steiner Sports, he said:

“To me, the definition of success is waking up in the morning with a smile on your face, knowing it’s going to be a great day. I was happy and felt like I was successful when I was poor, living six guys in a three-bedroom apartment, sleeping on the floor.”


Legendary basketball coach John Wooden said it’s a matter of satisfaction.

With 620 victories and 10 national titles, Wooden is the winningest coach in college basketball history.

But his definition of success was more about competing with yourself than the other guy:

“Peace of mind attained only through self-satisfaction in knowing you made the effort to do the best of which you’re capable,” he said in a 2001 TED Talk.


Legendary investor Warren Buffett values relationships above all else.

With a net worth of $US77.4 billion, Buffett is just about the wealthiest person in the world, second only to Bill Gates. And yet his definition of success has nothing to do with money or fame.

As James Altucher writes, the chairman of Berkshire Hathaway once told shareholders at an annual meeting: “I measure success by how many people love me.”


Acclaimed author Maya Angelou believed success is about enjoying your work.

The late, great poet laureate, who passed away at 86 in 2014, left behind stacks of books and oodles of aphorisms.

Her take on success is among the best: “Success is liking yourself, liking what you do, and liking how you do it.”


Microsoft cofounder Bill Gates believes it’s about making an impact on society.

Gates is the wealthiest person in the world, with a net worth of $US86 billion, But to him, success is about relationships and leaving behind a legacy.

In a Reddit AMA, Gates took a tip from Warren Buffett when asked about his definition of success:

“Warren Buffett has always said the measure [of success] is whether the people close to you are happy and love you.”

He added: “It is also nice to feel like you made a difference – inventing something or raising kids or helping people in need.”


Spiritual teacher Deepak Chopra believes success is a matter of constant growth.

The physician and author says it’s a matter of continual growth.

“Success in life could be defined as the continued expansion of happiness and the progressive realisation of worthy goals,” Chopra writes in “The Seven Spiritual Laws of Success.”


President Barack Obama aims to change people’s lives.

Obama once held the highest office in the land – but he doesn’t equate power with success.

At the 2012 Democratic National Convention, First Lady Michelle Obama told the audiencethat her husband “started his career by turning down high-paying jobs and instead working in struggling neighbourhoods where a steel plant had shut down.”

She went on:

“For Barack, success isn’t about how much money you make. It’s about the difference you make in people’s lives.”


Inventor Thomas Edison recognised that success is a grind.

Edison – holder of over 1,000 patents – had an insane work ethic. He was reported to work 60 consecutive hours on occasion.

So naturally, his definition of success is equally ambitious: “Success is 1% inspiration, 99% perspiration.”


Popular author Stephen Covey said that the definition of success is deeply individual.

The late Covey became a massive success – and a part of popular culture – with his 1989 book, “The Seven Habits of Highly Effective People,” which has sold over 25 million copies.

Yet for Covey, success was categorically individual.

“If you carefully consider what you want to be said of you in the funeral experience,” he writes in the book, “you will find your definition of success.”


Billionaire John Paul DeJoria sees success as working hard — all the time.

DeJoria co-founded Paul Mitchell hair products and Patron tequila. In an interview with Business Insider, he reflected on the lessons he learned while working at a dry cleaner’s as a young man.

Apparently, the head of the store was impressed by how spic and span DeJoria kept the floors, even though no one was watching him clean.

That’s why he now believes:

“Success isn’t how much money you have. Success is not what your position is. Success is how well you do what you do when nobody else is looking.”

Read the full article here

Weekend video: Amazing Facts to Blow Your Mind

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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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